DTEK Plans To Buy Three Remaining Coal Consignments From South Africa

The DTEK private energy holding plans to buy about 250,000 tons of coal from South Africa that the Ukrinterenergo state enterprise originally contracted for delivery to the state-owned Tsentrenergo power company’s thermoelectric power plants. Minister of Energy and Coal Industry Yurii Prodan announced this on Tuesday, the Interfax Ukraine news agency reports.

"This is the fourth or sixth ship that they do not want [to buy] at Tsentrenergo because of audits," the head of the Ministry of Energy and Coal Industry told reporters in Kiev on Tuesday.

He added that DTEK was considering the possibility of holding talks on further purchases of coal from South Africa because of the unpredictability of the situation involving Russian coal supplies.

As reported, the MBA Rosaria vessel, which is carrying the fourth consignment of 84,600 tons of coal from South Africa, is anchored on the boundary of Ukraine’s territorial waters. Two more vessels loaded with coal from South Africa are expected to arrive in Ukraine in December 2014: the Rosco Poplar bulk carrier with 77,800 tons of coal and the Bottiglieri Sophie Green bulk carrier with 84,000 tons.

In total, 250,000 tons of coal from South Africa was planned for delivery to Tsentrenergo’s thermoelectric power plants at the cost of USD 86 per ton (USD 110-112 per ton, taking account of the costs of loading and unloading of vessels, transportation, and other costs) by the end of 2014.

The Prosecutor-General’s Office has interrogated senior officials of the Ministry of Energy & Coal Industry, Ukrinterenergo, and the Tsentrenergo power company in connection with an investigation into coal purchases from South Africa and the financing of coal enterprises on territories currently outside Kiev’s control. Prodan recently said that this investigation prompted the seller of the South African coal - Steel Mont Trading Ltd (Britain) - to refuse to make further deliveries under the contract that was previously signed because it feared that payment would not be made or shipment would be blocked.